Charter/Time Warner Cable: cowboy up

TWC was once less excited about shares in Malone’s company

Ryanair: Ryan high

Premium services and a premium rating. What sort of budget airline is this?

Samsung group: money for nothing

It is hard to see how latest proposed merger generates value

UK annuities: hope in the gloom

Providers have been hit by changes to pension rules but they are not finished yet

Yelp: order up a deal

The review website should be part of a bigger business

Charter/Time Warner Cable: everything is possible

In the current climate, size, price and leverage mean little

©David Crow

Amazon: buying loyalty

Membership programme still is not big enough

Carlyle group logo

The Carlyle Group: greener grass

Private equity used to be a dream job

Wacker: silicon valley

In cyclical, oversupplied industries, a break-up will help

South Africa: away games

Why bother with a London listing?

  • Just Eat: a whole lotta kebabs

    Just-Eat offered to pay £445m (A$867m) for Australian take-away delivery company Menulog. That’s a whopping 371 times earnings (before interest, taxes, depreciation and amortisation). Using last year’s results as a starting point, what does Menulog need to deliver to make that price reasonable?

    Our initial calculations of what Menulog needs to deliver were challenged by some Lex readers… and while Lex is never wrong, we are willing to become more right, if given the opportunity. So the analysis below has been changed since it was initially published (the changes are detailed at the bottom for anyone interested).

  • Pretty little shells?

    So maybe things are starting to get a little overexcited in Hong Kong. We notice two recently listed micro cap companies that have had stratospheric rises.

    Firstly Yan Tat Group, a printed circuit board manufacturer with revenues of $86m. In 4 days the market capitalisation had gone from just over $300m to a high on Friday morning of $3.2bn. At that high, the share price was up over 3 times versus Thursday’s close. At pixel time, however, the share price was down over one third from Thursday’s close and falling. That is an intraday swing in market capitalisation of $2.5bn.

  • The math behind Heinz/Kraft

    Missing from the press release on the Kraft Heinz deal is just how much explicit value Kraft shareholders are getting. It’s an odd structure where Kraft gets 49 per cent of the new company PLUS a one-time dividend of $16.50.

    Kraft shares have traded up to more than $80.

  • Ocado, mashed into guacamole

    Lex has a tricky realtionship with go-go e-retail businesses. Their valuations – that is, the relationship of their stock prices to their profits – imply long-term growth rates inconsistent with the normal competitive pressures in retail. So mostly we make surly comments about them. There is, however, another side of the story. Online retail leadership does seem to persist. So in a recent note about Ocado, the UK grocer, we departed a little from our previous dour tone, and tried to articulate the bull case. Here is our summary:

    [sceptics about Ocado's valuation] have failed to accept the core principles of online retail investors. Namely that much more of the market will convert to online; that the leader online, because of economies of scale, will never be overtaken by the also-rans; that margins online will expand beyond those of the traditional competitors; and that the bricks-and-mortar leaders will never become digitally competent. Accept this catechism, and all else follows. It is easy to doubt the four together, but in Ocado’s case, no one of them is obviously wrong, either.

SHARE THIS QUOTE